Blockchain for Banking News Supply chain

Gazpromneft Aero completes trial of blockchain smart fueling system

gazprom aviation fuel

Today Gazpromneft Aero, the aviation fuel division of Gazprom Neft, announced it has tested its blockchain smart fueling system in more than 100 scheduled flights. The trial involved airline Smartavia, VT Bank and Raiffeisenbank and is now ready to ramp up into production. A spokesperson told Ledger Insights that the solution ‘can be distributed globally’.

The oil company reckons it cuts payment processing times from four or five days to 15 seconds. Refueling an aircraft is challenging because oil prices are not static and the airline may not know exactly how much fuel they need until the last minute. Using blockchain smart payments avoids the need for advanced payment or a bank guarantee.

“This revolutionary approach to aircraft refuelling is particularly important for our airline — it makes the process fast, transparent and up-to-date,” said Sergey Savostin, CEO Smartavia.

Many airlines have entire offices that are dedicated to refueling invoices and tracking the costs and paperwork. With this solution, there’s no need for an airline to reconcile its paperwork to the fuel company’s invoices because the agreed amount is on the blockchain.

Given the pandemic, the app eliminates direct contact between aircraft crew and ground staff and avoids the need for paperwork to be shared. The pilot uses a tablet-based app and there’s a module on the refueling truck. Plus, the payment is digital.

When the fuel truck arrives and is told how much fuel is needed, an initial payment transfer request is sent to the bank to block funds. After the refueling is completed, the aircraft captain will adjust the payment amount and authorize the final payment.

“Our new digital Smart Fuel system has facilitated our partners processes and increased the financial security of mutual settlements, which is extremely important in the current macroeconomic conditions,” said Anatoly Cermer, Deputy CEO at Gazprom Neft. “The system has a high potential for scaling up across the entire industry.”

The solution uses the enterprise blockchain Hyperledger Fabric.

In August 2018, Gazprom was involved in another blockchain refueling trial with airline S7 and Alfabank. A spokesperson explained to Ledger Insights that the S7 application was a proof of concept where S7 adapted an existing airline ticketing solution.

Between then and now Gazprom Neft developed its own solution and also explore the legal basis for it. While grateful for the S7 experiment, the spokesperson noted, “it is quite logical that the development and implementation of this IT solution is done by the aviation fuel operator instead of the airline.”

It’s also a participant in a Russian blockchain bank guarantee platform alongside both Raiffeissennank and VTB.